MEMORANDUM
FOR: |
Joseph
A. Spetrini
Deputy Assistant Secretary
AD/CVD Enforcement Group III |
FROM: |
Roland
L. MacDonald
Executive Director
Office Seven |
SUBJECT: |
Final
Affirmative Scope Ruling - Antidumping Duty Order on Petroleum Wax Candles
from the People’s Republic of China(A-570-504); Boston Warehouse Trading
Corp. |
SUMMARY
On October 20, 1998, Boston
Warehouse Trading Corp. ("Boston") requested that the Department of Commerce
(the Department) issue a scope ruling finding its citronella garden torches
outside the scope of the antidumping duty order on petroleum wax candles from
the People’s Republic of China (PRC). Based upon an analysis of the information
on the record, as defined below, and in accordance with 19 CFR 351.225(k)(l),
we recommend that the Department determine that Boston’s candle containing citronella
oil is outside the scope of the order because this candle contains citronella
oil and is labeled as an outdoor candle, and is therefore not a standard candle
covered by the scope of the order.
BACKGROUND
In its October 20, 1998
request for a scope ruling (Request), Boston maintains that its citronella garden
torches should be excluded from the scope of the order because (1) the candles
do not fit within the candle shapes described in the scope, (2) the candles
have a strong citronella scent and are intended for outdoor use, (3) the candles
are not wax-filled containers, (4) its candles are outside of the scope as a
novelty candle, and (5) because the candles contain citronella oil. Request
at 5-8. The National Candle Association filed comments on Boston’s request.
ANALYSIS
The regulations governing
the Department’s antidumping scope determinations can be found at 19 CFR 351.225.
On matters concerning the scope of an antidumping duty order, the Department
first examines the descriptions of the merchandise contained in the petition,
the determinations of the Secretary and the International Trade Commission (ITC),
the initial investigation, and the order. This determination may take place
with or without a formal inquiry. If the Department determines that these descriptions
are dispositive of the matter, the Department will issue a final scope ruling
as to whether or not the subject merchandise is covered by the order. See 19
CFR 351.225(d).
Where the descriptions of
the merchandise are not dispositive, the Department will consider the five additional
factors set forth at 19 CFR 351.225(k)(2). These criteria are: i) the physical
characteristics of the merchandise; ii) the expectations of the ultimate purchasers;
iii) the ultimate use of the product; iv) the channels of trade in which the
product is sold; and v) the manner in which the product is advertised and displayed.
The determination as to which analytical framework is most appropriate in any
given scope inquiry is made on a case-by-case basis after consideration of all
evidence before the Department.
In the instant case, the
Department has determined that no formal inquiry is warranted to determine whether
or not Boston’s candles are covered by the scope of the order. We have evaluated
this request in accordance with 19 CFR 35l.225(k)(l) because the descriptions
of the product contained in the petition, the initial investigation, the final
determinations of the Secretary and the ITC, and the antidumping duty order
are, in fact, dispositive.
Documents and parts thereof
from the underlying investigation deemed relevant by the Department to the scope
of the outstanding order were made part of the record of this determination
and are referenced herein. Documents that were not presented to the Department,
or placed by it on the record, do not constitute part of the administrative
record for this scope determination.
In its petition of September
4, 1985, the National Candle Association requested that the investigation cover:
candles [which] are made
from petroleum wax and contain fiber or paper-cored wicks. They are sold in
the following shapes: tapers, spirals, and straight-sided dinner candles;
rounds, columns, pillars; votives; and various wax-filled containers These
candles may be scented or unscented ... and are generally used by retail consumers
in the home or yard for decorative or lighting purposes.
Antidumping Petition, September
4, 1985 at 7 (emphasis added).
The Department defined the
scope of the initial investigation in its notice of initiation. This scope language
carried forward without change through the preliminary and final determinations
of sales at less than fair value and the eventual antidumping duty order:
[C]ertain scented or unscented
petroleum wax candles made from petroleum wax and having fiber or paper-cored
wicks. They are sold in the following shapes: tapers, spirals, and straight-sided
dinner candles; rounds, columns, pillars, votives; and various wax-filled
containers.
Petroleum Wax Candles from
the People ‘s Republic of China: Initiation of Antidumping Duty
Investigation, 50 FR 39743
(September 30, 1985) (emphasis added); see also Petroleum Wax Candles from the
People‘s Republic of China: Preliminary Determination of Sales at Less Than
Fair Value, 51 FR 6016 (February 19, 1986); Petroleum Wax Candles from the People
‘s Republic of China: Final Determination of Sales at Less Than Fair Value,
51 FR 25085 (July 10, 1986); and Antidumping Duty Order: Petroleum Wax Candles
from the People ‘s Republic of China, 51 FR 30686 (August 28, 1986). The ITC
adopted a similar definition of the "like product" subject to its determinations,
noting that the investigations did not include "birthday, birthday numeral and
figurine type candles." See Determinations of the Commission (Final), USITC
Publication 1888, August 1986, at 4, note 5, and A-2 (emphasis added).
Boston describes its product
generally as citronella garden torches, and specifically as Boston Warehouse
styles 20126 (a Rainbow Tall Torch), 20124 (a Rainbow Mini Torch), 20139, (a
rainbow Stripe Tall Torch), 20141 (a Rainbow Stripe Mini Torch), 20140 (a Black
& White Stripe Tall Torch) and 20142 (a Black & White Stripe Mini Torch).
Boston states that these candles each contain 2% citronella oil. They consist
of a bamboo stake and fiber wick dipped in petroleum wax. Each product contains
tags stating that the candles are "For outdoor use only," that the products
contain citronella, and that the products are "An Outdoor Candle Torch for Garden,
Patio, Beach and Snow." Boston claims that the 2% concentrated citronella oil
allows its products "to function as an outdoor insect repellant." Request at
3. Boston states that these candles "would be used by the consumer to repel
insects from outdoor gatherings...The torch shape also lends a festive atmosphere
to a gathering, reminiscent of tropical luaus." Id.
Boston argues that its citronella
garden torches fall outside the scope of the order because (1) the candles do
not fit within the candle shapes described in the scope, (2) the candles have
a strong citronella scent and are intended for outdoor use, (3) the candles
are not wax-filled containers, (4) its candles are outside of the scope as a
novelty candle, and (5) the candles contain citronella oil. Request at 5-8.
For the following reason, we have determined that the subject product is outside
the scope of the antidumping duty order on petroleum wax candles from the People’s
Republic of China.
First, while we agree that
the citronella garden torches are not wax-filled containers, the shapes of these
products do not bring them outside the scope of the order. These torches are
cylindrical shapes which taper at one end, and "tapers" are explicitly included
within the scope of the order. The Department previously analyzed candles mounted
on bamboo stakes in Sun-it Corp. (May 16, 1995). In that determination, the
Department found the products to be outside the scope, but on the basis that
the wax portion of the candle was shaped in the form of an "identifiable object,"
a partially furled flag or a flower. Sun-it Corp., at 3-4. Boston argues that
the wax portion of its candles are shaped to represent the shape of a flame
of a torch when unlit, and should therefore be excluded from the scope consistent
with Sun-it Corp. See Request at 7. We find that Boston’s candles are tapered
cylindrical shapes which do not resemble a flame or any other identifiable object.
Therefore, Boston’s citronella garden torches are not outside of the scope based
on the exception to scope coverage for novelty candles.
The Department analyzed
a candle containing citronella oil labeled for outdoor use in response to a
request by Target Stores, A Division of Dayton-Hudson (December 15, 1998) (hereinafter
"Target"), and found that candle to be outside the scope of the order. Specifically,
the Department found that:
While the mere presence
of citronella oil in a candle might not bring that product outside the scope
of the order, those candles that the purchaser reasonably could expect to
have an insect repellant function (for example, most candles labeled for outdoor
use which also contain citronella oil) are not candles within the scope of
the order. The reason for this distinction is that these candles are purchased,
at least in part, for a purpose other than providing light or decoration,
namely, repelling insects.
Target at 8. Because Boston’s
citronella garden torches are also candles labeled for outdoor use and labeled
as containing citronella oil, those candles are substantially similar to the
candles the Department analyzed in Target. Therefore, we find that Boston’s
candle is not a standard petroleum wax candle and that this candle is outside
the scope of the order on petroleum wax candles from the PRC. See also Star
Merchandise Company. Inc., July 27, 1994 and Fabri-centers of America. Inc.,
September 3, 1991 (candles containing citronella oil found to be outside the
scope of the order on petroleum wax candles from the PRC).
RECOMMENDATION
We recommend the Department
find Boston’s products, described as petroleum wax candles of various colors
and sizes containing 2 percent citronella oil and mounted on bamboo stakes,
outside the scope of the antidumping duty order on petroleum wax candles from
the PRC.
If you agree, we will send
the attached letter to the interested parties, and will notify the U.S. Customs
Service of our determination.
_____√_____Agree ___________Disagree
Joseph A. Spetrini
Deputy Assistant Secretary
AD/CVD Enforcement Group III
DEC 18 1998
Date